Doing so could markedly increase the number of donations made every year without compromising the altruisitic motivation behind the act, the Nuffield Council on Bioethics has concluded in a report published last night (MON).

Hugh Whittall, director of the centre, said there was a need to think radically because demand for organs far outstripped supply.

"8,000 people are currently on a list for transplant and three people die every day while waiting for an organ," he said.

Even though 29 per cent of the population is on the Organ Donor Register, the number who actually donate organs upon death is remarkably small: only 1,010 did so last year.

There is often uncertainty among family of individuals not on the register about whether he or she would have wanted to donate.

Dame Marilyn Strathen, professor emiritus of social anthropology at Cambridge University, who chaired the group looking at the issue, said: "Paying for the funeral of organ donors would be ethically justified - no harm can come to the donor, and it would be a form of recognition from society.

"We think a pilot scheme to test the pulic response to the idea is worth trying, alongside other schemes.

The working party has not proposed a concrete figure for the scale of contribution towards each funeral, which can easily cost thousands of pounds a time.

However, Keith Rigg, a consultant translant surgeon at Nottingham University Hospitals and member of the group, suggested a minimum figure of £1,500.

He also made clear the proposal was only to offer payment of funeral expenses to families of donors already on the register. The idea would be to make it part of the offer to those considering signing up.

This was to avoid what the group conceded was the ethically problematic situation of offering funeral expenses "directly to bereaved relatives who would otherwise refuse permission".

The proposal is not without objections. Despite its caveats, there is considerable unease that the proposal amounts to payment in kind, if not to the donor then the family.

Roger Goss, co-director of Patient Concern, said: "‘We worry that offering funeral expenses in return for organs may result in families leaning on sick relatives to donate because it can save thousands of pounds."

Dr Tony Calland, chairman of the British Medical Association's medical ethics committee, described the proposal as "an interesting idea".

But he said: "The BMA still believes that one of the best ways to increase organ donation is to move to an opt-out system [of donor registration] with safeguards and we will continue to lobby for this."

There is also the question of whether it would be cost effective to pay for lots of donors' funerals, when most may well have donated anyway.